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Boom in challenger banks swells hiring of interim managers to grow market share

Interim managers are usually appointed at or just below board-level on a short term basis to implement major restructuring or change programmes. At so-called challenger banks, interim roles in demand include:

&middot Interim Chief Operating Officers to make sure that systems are established that avoid some of the complexity and duplications that have partly led to high cot to income ratios at traditional banks.

&middot Interim Chief Risk Officers to ensure the bank’s systems and controls are robust enough to manage risks as they scale up their loan books.

&middot Interim Chief Financial Officers to ensure that general business and financial reporting processes are fit for purpose as the bank grows and that their balance sheet is managed effectively.

&middot Interim Heads of Sales and Marketing to oversee the launch of new products and services.

Antony Flagg, senior consultant at Interim Partners, said, “Challenger banks tend to be niche financial services providers which are taking an innovative, entrepreneurial approach to grow into the retail banking space currently dominated by just a handful of major players, by offering more competitive or service led products.

“It’s an approach which is starting to prove attractive to potential customers. As these organisations grow rapidly, they are turning to experienced interim managers, particularly those with extensive experience working within the major high street banks, to help them keep up the pace.

“The top-level interim expertise they are recruiting for goes right across the board. They need chief operating officers to help execute strategy, senior risk and compliance officers to make sure the regulators are happy with their activities, and sales and marketing leaders who can develop trust with consumers by establishing a brand value, and differentiate their products from their big bank competitors.

“While the challenges faced can be significant, so are the rewards. Demand for interims with the right skills and experience is so high that daily rates, even in still comparatively small institutions, are incredibly strong.”

Interim Partners says that more relaxed rules introduced last year making it easier to apply for new banking licenses as well as M&A activity in the sector have contributed to an increase in the number of small or niche banks developing a presence in the retail banking marketplace.

Examples of new challenger banks launching in the last few years include Metro Bank, Aldermore Bank and Shawbrook Bank. Other challengers to traditional high street banks include Virgin Money and Tesco Bank which now offers mortgages and is to launch a new current account this summer to add to its existing credit card, loan and insurance services and M&S which provides a range of personal banking services.

Flagg added, “Challenger banks come in all shapes and sizes, from established household names like Tesco or M&S looking to shake up the market or new entrants developing their own brand identities as an alternative to big bank dominance.”

“Interim managers are a major force in enabling them to establish their own USP, deliver on service quality and product roll-outs, embed robust systems and processes and build reputation and brand currency.”

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